Strategic Account Management:Concepts & Implementation for CEOs

and Sr. Executives

K. Krishnan

1/12/2007

Account Management structure

CEO

Director – Business

Development

Director – TechnicalSolution

Director – Finance

Director - HRDirector –

Development

Business Development Structure

Director Business

Development

VP – B DBFSI

VP – BDRetail

VP – BDTelecom

Business Development Structure

Director Business

Development

VP – B DUK

VP – BDGermany

VP – BDFrance

Business Development Structure

VP – BD BFSI

Manager – Strategic Account

Manager – Strategic Account

Manager – Strategic Account

Deutsche BankBarclays Bank

HSBC, SCB, AMEX

ABN AmroLloyds, NatWest

PrudentialLombardAlliance

Content

Session overviewClient needs assessmentAccount action planSession summary

What is strategic account management

A business strategy focused on a small number of important clients viewed as corporate assets with significant long term value

Solution orientation, revenue share maximization at requisite margin level and customer value creation are three most important objectives

Find ways to help both parties make and save money The voice of the customer within your company

Basics of Strategic Account Management (SAM)

Selection of the right account : High revenue Complex solutions Multi locations High growth High margin

Definition of the value proposition Appropriate solutions Value for money Long term orientation

Conducting needs assessment Current scenario Future plans Technology preferences Identifying key influencers

Create account action plan Account strategy Solution strategy Competition assessment Pricing strategy

Basics of Strategic Account Management (SAM)

Basics of Strategic Account Management (SAM)

Present findings to the client Deploy cross functional team Implementation of plans Summarized results for senior leadership for long

term strategic decisions

Help both parties find ways to make and save money

SEM – Key Account Selling

Pre Account Management Selling: One to One contact Supplier presentation focus on their own issues and

concerns Response to customer enquiries is “ Yes” and “No”

based on assumed customer needs and supplier capabilities

Seller seeks volume potential Customer seeks evidence of competence and

competitiveness Customer will judge competitiveness based on price Customer may require trial period The buyer may act as “Goal keeper” and prevent

access to other buyers

SEM – Key Account Selling

Early stage account management: Principal contact is between two people –

buyer and account manager The relationship may be competitive – each

seeking advantage Discussions dominate:

Price Supplier capability

Customer still assessing alternative supplier

SEM – Key Account Selling

Mid stage account management: Principal contacts start to facilitate other

contacts through mutual trust Increased time spent in meeting Increased trust and openness Mishaps can occur crossing set backs This is a lot of work for both buyer and seller

SEM – Key Account Selling

Partnership stage: Information is shared Relationship is based on trust Access to people is facilitated Clear vendor ratings and performance

measures are in place Value is sought through integrated business

practices Value is sought through focus on customer

needs

SEM – Key Account Selling

Strategic stage Joint R&D Transparent costs and margins Focus on innovation (blue ocean thinking) Joint business plans Collaborative approach to customers, new markets and

end users Shared communications Shared training

Help both parties find ways to make and save money

Needs Assessment

What is needs assessment A survey guide that is used to interview and

document client representatives How can it be used

One – on – One with your clients: The questions are asked by the Account Manager with or without presales team member and documents the response given by the customer

How long does this process last: At senior levels the interview should last about 45-

60 minutes, at the middle management level about 2 – 3 hours and at a working level could vary depending on depth to which data collection is involved

Needs Assessment How often is it used:

With all the top accounts, this is an ongoing process and is not time consuming since the additional information is incremental. However, in the case of a new client this could be a lengthy process

How does one deal with the data collected: Proper documentation Summarizing essence of finding Developing strategic solutions Sounding out customers

What are the advantages of this process: Improved understanding of customer needs Improved customer relationships Increased knowledge within our organisation Higher closure rates Better proposals and solutions Increased customer loyalty Well defined voice of a customer

Needs Assessment

How many organizations use a client needs assessment Global – 60% Indian – 20%

Most successful account managers do proper needs assessment and documentation. Though this is not a very “exciting” part of the account management process, it leads to much higher success rate

Needs Assessment – Client interview questions

Strategic: What changes have occurred in your industry

during the last two years How have these changes impacted your

organization What changes are forecasted for your

organisation during the next year What are the top three priorities for your

department in the next year

Needs Assessment – Client interview questions

Operation: How does your current business work Complete supply chain starting from vendor

end to consumer end What are the current processes (capture

workflow with input documentation, action at each step in the process and reports)

Level of automation and technologies used Current problems and gap areas Impact prioritization

Preparation for meeting

Define the clear objectives and goals of the meeting

Do some preparatory work about the industry, client organisation from the web or other published documents

Try to find out about the individuals whom you are meeting

In case it is an existing client, find out about the current status including customer issues, resolutions etc.

Long term decisions

Organizational strategy Planning process Competitive assessment New products and services Deployment strategy

Automatic Red Flags

Missing critical information: This should be identified at the earliest and gaps plugged. Gaps in information can lead to incomplete and incorrect solutions thereby loosing the account

Uncertain about information Un-contacted buyers Buyer is new to position Re-organization at the client company

Perception Is Reality

Response is determined by buyer’s perception of: Immediate business situation How will the proposal change that situation Whether or not that change will make the desired

impact Is the change marginal and is there value for money

Perception of buyer alone is not sufficient. All the people involved in the process of decision making should be

positively impacted

Response Modes

Result

Desired state

Desired state

Reality

Current stateDiscrepancy

Growth Mode

Result

Reality

Discrepancy

Vitals: Perceives discrepancy Receptive to change Change to improve a good situation

Probability of action: Very high

Trigger words: More Better Faster Growth Improved

Clutch Your proposal should be the change agent

Trouble Mode

Result

Discrepancy

Vitals: Perceives discrepancy Receptive to change Change to fix a bad situation

Probability of action: Very high

Trigger: Help – sense of urgency

Clutch Proposal must be the change

that will quickly reduce

or eliminate the discrepancy

Reality

Neutral Mode

Result

Vitals: Perceives no discrepancy Not receptive to change Nothing to fix

Probability of action: Medium / low

Triggers: Don’t rock the boat

Clutch Proposal is a threat unless

another buyer pressures

or you can demonstrate

discrepancy

Reality

Reverse Mode

Vitals: Doing better than anticipated Not receptive to change Nothing to fix

Probability of action: Low

Triggers: Never been better

Clutch Proposal has negative impact

on reality

Reality

Result

Buyer Types

Economic buyer User buyer Technical buyer Coach buyer

Economic buyer

Position: Rubber stamp Role: Gives final approval for buying

Controls money Has veto power

Focus Bottom line impact Organizational impact

Asked for: RoI Impact on organization

User buyer

Position: Tester Role: Judge impact on products / services on his /

her job performance: Will use or supervise use of products / services Link between user buyer’s success and the success of

product and service Focus

Task on hand Asked for:

Performance improvement for self Performance improvement for the department

Technical buyer

Position: Gate keeper Role: Measures quantifiable aspects of products/

services against specification Can’t give final approval Can advise against based on technicalities Criteria used: Price, delivery schedule, logistics, terms

& conditions, regulations, credit etc. Focus

Not win but play Asked for:

Does it meet requirement

Coach buyer

Position: Friend Role: Acts as a guide for sale:

Provide / interpret information about validity of single sales objective, other buyers, long term plans etc.

Focus Your success with this objective

Asked for: How can we ensure that this solution is

accepted